The Essence of Making Better Decisions

When you make important decisions, there are a few key factors to keep in mind. For example, you should rationalize and understand the problem itself. You need to know the problem you’re solving. You should also set boundary conditions for the solution. Success is often a spectrum so you should set boundaries so that you don’t limit yourself to something that’s impractical or something that’s impossible.

Your decisions should be action-oriented. If you can’t act on your decisions, then it’s a waste of time. You should also be able to respond to feedback once you implement your decision. What looks good on paper or sounds good, may not work when you actually test it.

The 5 Elements of an Effective Decision Making Process

According to Peter Drucker these are the 5 elements of an effective decision making process.

1. The Problem Rationalization.

The clear rationalization that the problem was generic and could only be solved through a decision that establishes a rule or a principle. Know the problem your solving.

4. Action.

5. Feedback.

We make decision every day. Some decisions are more important than others.

What’s important is that when it comes to making better decisions that you figure out a process that works for you, and helps you make better decisions, more consistently, and in a variety of scenarios, whether for work or in your personal life.

7 COMMENTS

Sounds like the ideal follow-up to the leadership post. You probably can’t have one with out the other to work at top-notch effectiveness. As in, if the boss loses his cool how can he be expected to make the best decisions?

I like how you break everything down to just 5 elements. For me Action is the one the speaks to me the most, because I believe that is the major show stopper for most. I enjoyed this post very much.
Giovanna Garcia
Imperfect Action is better than No Aciton

There’s a lot to be said for cool-headed cats. I forget where I saw it, but somebody asked what all leaders have in common … and it’s that they keep their heads under pressure. It makes a lot of sense.

@ Giovanna

I’m a fan of action. I think really what it is though, is the feedback. It’s testing ideas against reality. I think speeding up feedback loops is a key to success.

Great question. I originally wondered if it was too business oriented, but then I noticed the principles themselves hold true outside of work too.

For exaple, some decisions just aren’t worth over-engineering. For any decision worth spending time on, it’s important to know the boundaries (and who’s boundaries or who needs to buy in). I think it’s also key to know the right thing to do, even if you’ll have to make compromises (at least know what the ideal is before you hack it up). The actionable part and the feedback are also very relevant.

I think the biggest distinction is the decision criteria. For example, decisions at work may be more about a business case or data, whereas at home they’ll be more about values.

Ironically, outside work can benefit from more “business sense” and work can benefit more from some more life and personal values.